Correlation Between SPDR DoubleLine and FlexShares Ready
Can any of the company-specific risk be diversified away by investing in both SPDR DoubleLine and FlexShares Ready at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SPDR DoubleLine and FlexShares Ready into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR DoubleLine Total and FlexShares Ready Access, you can compare the effects of market volatilities on SPDR DoubleLine and FlexShares Ready and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SPDR DoubleLine with a short position of FlexShares Ready. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR DoubleLine and FlexShares Ready.
Diversification Opportunities for SPDR DoubleLine and FlexShares Ready
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPDR and FlexShares is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding SPDR DoubleLine Total and FlexShares Ready Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Ready Access and SPDR DoubleLine is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SPDR DoubleLine Total are associated (or correlated) with FlexShares Ready. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Ready Access has no effect on the direction of SPDR DoubleLine i.e., SPDR DoubleLine and FlexShares Ready go up and down completely randomly.
Pair Corralation between SPDR DoubleLine and FlexShares Ready
Given the investment horizon of 90 days SPDR DoubleLine Total is expected to generate 16.2 times more return on investment than FlexShares Ready. However, SPDR DoubleLine is 16.2 times more volatile than FlexShares Ready Access. It trades about 0.07 of its potential returns per unit of risk. FlexShares Ready Access is currently generating about 0.85 per unit of risk. If you would invest 3,998 in SPDR DoubleLine Total on August 28, 2024 and sell it today you would earn a total of 21.00 from holding SPDR DoubleLine Total or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR DoubleLine Total vs. FlexShares Ready Access
Performance |
| Timeline |
| SPDR DoubleLine Total |
| FlexShares Ready Access |
SPDR DoubleLine and FlexShares Ready Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR DoubleLine and FlexShares Ready
The main advantage of trading using opposite SPDR DoubleLine and FlexShares Ready positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR DoubleLine position performs unexpectedly, FlexShares Ready can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in FlexShares Ready will offset losses from the drop in FlexShares Ready's long position.| SPDR DoubleLine vs. PIMCO Active Bond | SPDR DoubleLine vs. SPDR Blackstone Senior | SPDR DoubleLine vs. SPDR Barclays Intermediate | SPDR DoubleLine vs. SPDR Bloomberg Investment |
| FlexShares Ready vs. SPDR SSgA Ultra | FlexShares Ready vs. FlexShares iBoxx 3 Year | FlexShares Ready vs. FlexShares iBoxx 5 Year | FlexShares Ready vs. PIMCO Enhanced Low |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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